Nadella's razor gang is scrapping Xbox Entertainment Studios as Microsoft rethinks its place in the new world.

Microsoft took the knife to the newly acquired Nokia last week, but Nokia wasn't the only victim of new chief Satya Nadella's efforts to get the tech giant back on track. He also decided that Microsoft doesn't belong in the growing content war between online giants like Netflix and old-world behemoths like HBO.

When Microsoft is already fighting several wars on different fronts, getting out of the content business is probably a wise move if Nadella wants to get Microsoft moving in the right direction.

Microsoft founded Xbox Entertainment Studios back in 2012, a subsidiary of Microsoft Studios aiming to develop original programming for Xbox Live and the upcoming Xbox One games console. In a dramatic reversal from the previous generation of consoles, Microsoft was keen to paint the Xbox One as an all-singing, all-dancing entertainment console alongside Sony's very gaming-centric PlayStation 4.

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Xbox Entertainment Studios was a key part of that strategy and Microsoft tends not to do things by halves. One of the first projects was a live action television series based on the Halo gaming franchise, with big names like Steven Spielberg on board. The first "Xbox Originals" program went live last month, a tie-in with the World Cup, and projects already started by Xbox Entertainment Studios will be completed so the Halo series should see the light of day.

Other dramas in the pipeline from Xbox Entertainment Studios included an original sci-fi series and a remake of sci-fi classic Blake's 7. In a sign of its long-term intentions, Microsoft even snapped up former CBS Television Studios president Nancy Tellem to lead its entertainment and digital media arm.

Content is king, but developing your own is a risky and expensive business. Even tech companies with deep pockets like Netflix and Amazon only started to commission their own TV shows, like House of Cards, because they were trying to break HBO's stranglehold on premium programming like Game of Thrones. Murdoch's bid for HBO's owner Time Warner raises the stakes again and this war is certainly no place for the faint-hearted.

In the past Microsoft's ambition has seen it too keen to throw good money after bad and Satya Nadella is clearly trying to change that culture. He seems determined to focus the company's efforts on fighting in the mobile and cloud spaces, where it already has a decent foothold but faces formidable foes like Google and Apple. Moving onto foreign ground and leaping into the war between Netflix and HBO was unlikely to end well.

Is your console a games machine or all-round entertainment hub? As the content wars heat up, where do you turn for your entertainment?

3 comments so far

I do use the XBone as a Blu-Ray player, and if Plex ever got around to releasing an app for it i'd use it for that too, however the PC is still king for media in my household.

Commenter

Davo B

Date and time

July 23, 2014, 1:12PM

Much the same here.

My son has an xbox we use as an extender from our HTPC. I have an xbox linked to his and the HTPC but it doesnt come close to Plex on the HTPC as a media player/streamer.

No need for DVD's Blu-Rays here. Apart from the daily news and 7.30 everything is downloaded.

Commenter

ArnB

Location

Sydney

Date and time

July 24, 2014, 3:58PM

I feel decieved be MS over my xbox one. They said it would have interactive TV but that was only in the USA, same same with controlling the tv with the connect. I had realised my 360 games would not work with it so I sold them, however my Xbox Live games that I had spent a fair bit of money on didn't work either and for that I am pissed, the idea that I would spend any more money on Live when it will go down the drain with their next machine is laughable. The final straw for me is their abandonment of the connect. They made me spend $100 on mine and waffled on about it being the future of gaming and now they ditch it so it will no longer be used in gamesI buy all my games on PC now as a knoe I will be able to play them or sell them in the years to come on my next PC's, and they have much better graphics than either console.